Exhibit 10.2.2
SEVENTH SUPPLEMENT
AMENDING NORTHERN BORDER PIPELINE COMPANY
GENERAL PARTNERSHIP AGREEMENT
DATED SEPTEMBER 23, 1993
This Agreement is dated as of September 23, 1993 (the "Seventh Supplement')
by and among (i) the "Divesting Partners", consisting of Northern Plains Natural
Gas Company, a Delaware corporation ("Northern Plains"), Pan Border Gas Company,
a Delaware corporation ("Pan Border"), Northwest Border Pipeline Company, a
Delaware corporation ("Northwest Border"); (ii) TransCanada Border PipeLine
Ltd., a Nevada corporation and TransCan Northern Ltd., a Delaware corporation
(said two TransCanada affiliates hereinafter referred to collectively as
"TransCanada"); and (iii) Northern Border Intermediate Limited Partnership, a
Delaware Limited Partnership ("NBILP").
WITNESSETH THAT:
WHEREAS, the Divesting Partners and TransCanada are parties to that certain
General Partnership Agreement relating to the formation of Northern Border
Pipeline Company, a Texas general partnership ("the Partnership"), effective as
of March 9, 1978, as amended by (i) the "First Supplement", dated as of October
25, 1979, (as amended by Agreement dated April 20, 1990), (ii) the Phase I
Partnership commitment Agreement dated December 12, 1980, (iii) the "Second
Supplement" dated as of December 15, 1980 (as amended by Agreement dated April
20, 1990), (iv) the "Third Supplement" dated October 1, 1981, (v) the "Fourth
Supplement" dated February 17, 1984, (vi) the "Fifth Supplement" dated April 20,
1990, and (vii) the "Sixth Supplement" dated April 19, 1991, such Partnership
Agreement, as amended, being herein referred to as the "Partnership Agreement";
and
WHEREAS, the Divesting Partners intend to transfer, pursuant to Section
10.1 of the Partnership Agreement, each of their respective equity interests in
the Partnership to NBILP; and
WHEREAS, TransCanada has elected not to transfer its equity interest; and
WHEREAS, to facilitate the admission of NBILP as a general partner in the
Partnership, the Divesting Partners, TransCanada and NBILP desire to evidence
herein (i) the consent of TransCanada to the transfer by the Divesting Partners
of their respective equity interest in the Partnership to NBILP, (ii) the
admission of NBILP as a general partner in the Partnership, and (iii) certain
amendments to the Partnership Agreement.
NOW, THEREFORE, the Divesting Partners, TransCanada and NBILP, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms shall
have the meanings set forth in the Partnership Agreement.
2. CONSENT OF TRANSCANADA. TransCanada hereby consents to the transfer
by each of the Divesting Partners to NBILP of its interest in and to the
Partnership and agrees that each such transfer shall be permitted
notwithstanding the terms of Section 10.5 of the Partnership Agreement or any
other terms thereof that might prohibit such transfer.
3. ADMISSION OF NBILP. The Divesting Partners and TransCanada hereby
consent to the admission of NBILP as a partner in the Partnership
(notwithstanding the terms of Section 11.1.5 of the Partnership Agreement or any
other terms thereof that might restrict such admission of NBILP) and NBILP shall
become a Partner in the Partnership effective as of the closing date of the
transactions contemplated by that certain Registration Statement on Form S-1
(File No. 33-66158), as filed with the Securities and Exchange Commission by the
Northern Border Partners, L.P. and as amended from time to time (hereinafter
called the "Approval Date"). From and after the Approval Date, NBILP agrees to
be bound by all of the terms, obligations and conditions of the Partnership
Agreement.
4. AMENDMENT OF PARTNERSHIP AGREEMENT. The Divesting Partners,
TransCanada and NBILP hereby agree that the Partnership Agreement shall be
amended, effective as of the Approval Date, as follows:
(a) Section 1 of the Partnership Agreement is amended and is restated in
its entirety as follows:
1. PARTIES. The following are the parties to this Agreement:
1.1 Northern Border Intermediate Limited Partnership (hereinafter
referred to as "NBILP"), a limited partnership organized under
the laws of the State of Delaware with its principal place of
business located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
1.2 TransCanada Border PipeLine Ltd. (hereinafter called
"TransCanada Border"), a corporation organized under the laws
of the State of Nevada. TransCanada Border represents that
all of its capital stock
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is owned by TransCanada PipeLine USA Ltd., a Nevada
corporation, and a wholly owned subsidiary of TransCanada
PipeLines Limited ("TransCanada"), a Canadian corporation.
1.3 TransCan Northern Ltd. (hereinafter called "TransCan"), a
corporation organized under the laws of the State of Delaware,
with its principal corporate offices at ▇▇▇-▇ ▇▇▇▇▇▇ ▇.▇.,
▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇. TransCan
represents that its capital stock is beneficially owned by
TransCanada.
(b) Section 2.45 of the Partnership Agreement is amended to delete the
reference to Sections 1.1 through 1.4 and replace it with "...Sections 1.1
through 1.3."
(c) Section 2 of the Partnership Agreement is amended to add the
following:
2.60 SEVENTH SUPPLEMENT. The Agreement dated as of September 23,
1993 among the Partners.
(d) Section 3.6 of the Partnership Agreement is amended to add a new
Section 3.6.1 to read as follows (and NBILP and TransCanada shall each be
deemed, as of the Approval Date, to have made the representations set forth in
Section 3.6.1):
3.6.1 REPRESENTATIONS AND WARRANTIES CONCERNING 1993 CHANGE IN
COMPOSITION OF PARTNERSHIP. Each Partner represents and
warrants that, subject to the receipt of all required
regulatory or lender approvals, if any, relating to the
Seventh Supplement, the execution and delivery by such Partner
of the Seventh Supplement, the change in the composition of
the Partnership to admit NBILP in lieu of the Divesting
Partners, and the performance by such Partner of its
obligations under the Partnership Agreement, as amended, will
not contravene any provision of, or constitute a default
under, any indenture, mortgage or other agreement of such
Partner or any order of any court, commission or government
agency having jurisdiction. Each Partner further (1)
represents and warrants that it is a corporation or a limited
partnership duly organized and existing under the laws of its
state of incorporation or organization, (ii) covenants that it
will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate or limited
partnership existence for so long as it shall remain a
Partner, and (iii) covenants that it will not enter or conduct
any business or activity other than, under circumstances not
contrary to the best interests of the Partnership, those
reasonably related to the construction,
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ownership and operation, including operation for others, of
pipeline facilities for the gathering, processing, treatment,
storage, marketing and transportation of gas (as defined in
the Partnership Tariff) and associated by-products.
(e) Section 7.6 of the Partnership Agreement is amended by adding at the
end thereof the following paragraph:
The Parties intend that all tax items arising from or attributable to
any change in the tax basis of Partnership properties occasioned by
the admission of NBILP as a Partner and related transaction shall be
allocated solely to NBILP. Accordingly, to the extent deemed
necessary by the Management Committee, income, gain, loss and
deduction shall be allocated for a federal (and any applicable state)
income tax purposes among the Partners in such manner (using any
reasonable method, including curative allocations, consistent with
Section 704(c) of the Internal Revenue Code of 1986 and the
regulations promulgated or proposed thereunder) as will achieve such
intent.
(f) Sections 8.2.1, 8.2.2, 8.2.4 and 8.2.5(ii) of the Partnership
Agreement are amended and restated in their entirety to read as follows:
8.2.1 The Management Committee shall consist of four members (the
"Representatives"), one of whom shall be designated by
TransCanada Border and TransCan and three of whom shall be
designated by NBILP with one Representative being selected by
each general partner of NBILP. Each Partner shall designate,
by notice to each other Partner and the Partnership, its
Representative(s) to serve on the Management Committee. By
like notice, each Partner may designate an alternate
Representative for each Representative appointed by it, who
shall have authority to act on behalf of such appointed
Representative in the event of such appointed Representative's
absence or inability to serve. Any Partner may at any time,
by written notice to all other Partners and to the
Partnership, remove its appointed Representative(s) on the
Management Committee and designate a new Representative(s).
8.2.2 The Representative of NBILP selected by Northern Plains
Natural Gas Company, a general partner of NBILP ("Northern
Plains"), shall serve as the Chairman of the Management
Committee so long as Northern Plains remains as a general
partner in NBILP, but if the Chairman is removed, as below
provided, the Chairman shall be
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elected by the Management Committee. The Chairman may not be
removed from office except upon the affirmative finding by
unanimous vote of the Representatives other than the
Representative designated by Northern Plains if the total
number of Representatives is four or less or, if the total
number of Representatives is five or more, upon affirmative
finding by the vote of Representatives with Partners'
Percentages equal to no less than sixty-five percent of
Partners' Percentages that the Chairman has, through
misfeasance, nonfeasance or gross negligence, acted in a
manner contrary to the best interests of the Partnership. A
vote on removal of the Chairman may be held only after the
Chairman has been given reasonable notice of, and an
opportunity to be heard on, a call for removal by one or more
of the Representatives.
8.2.4 The Management Committee shall designate, from among its
members subject to Section 8.3.1, members of the Audit and
Compensation Committee and may create such other committees as
may be required.
8.2.5 (ii) The Partner's Percentages on all matters determined on or
after the Commitment Date. For this purpose, the
Representative(s) designated by NBILP shall have, in the
aggregate, a number of votes equal to the Partner's Percentage
of NBILP. Until NBILP provides written notification to the
other Partner(s) of a change in allocation of its number of
votes, the Representative of NBILP selected by Northern Plains
shall have a number of votes equal to 35%; the Representative
of NBILP selected by Pan Border Gas Company shall have a
number of votes equal to 22.75%; and the Representative of
NBILP selected by Northwest Border Pipeline Company shall have
a number of votes equal to 12.25%. The Representative
appointed by TransCanada Border and TransCan shall have a
number of votes equal to the combined Partner's Percentage of
such Partners. The majority of such votes cast by the
Representatives of the Partners shall constitute a majority of
the Partner's Percentages. Each Representative agrees not to
enter into a voting agreement with another Representative
pursuant to which such Representatives would vote as a block,
but this sentence shall not be construed to prohibit two or
more Representatives from agreeing with each other concerning
particular projects, issues or subjects.
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(g) Section 8.2.6 of the Partnership Agreement is amended to revise the
introductory paragraph as follows:
Without modification of its general authority under Section 8.1.1,
and as may be qualified under Section 8.2.7, the approval of the
Management Committee shall be necessary before any of the following
actions can be taken on behalf of the Partnership:
(h) Section 8.2 of the Partnership Agreement is amended to add the
following as new Section 8.2.7:
8.2.7 Subject to the remaining provisions of this Section 8.2.7,
without modification of its general authority under
Section 8.1.1, the unanimous approval of the Management
Committee shall be necessary before any of the following
actions can be taken on behalf of the Partnership:
Decisions to expand or extend the Line, including the
filing of the application for regulatory authority to
construct and operate such facilities and the acceptance
of such regulatory authority, excluding, however,
decisions on projects requiring capital expenditures of
less than $17,300,000 or such greater amount as may be
determined by reference to 18 CFR Section 157.108(d) or a
succeeding regulation;
The settlement of cases brought pursuant to Sections Four
(4) or Five (5) of the Natural Gas Act and acceptance of
regulatory orders approving such settlements; and
A change to, or suspension of, the cash distribution
policy of the Partnership as in effect on the date of the
Seventh Supplement.
Provided, however, that if any of the actions listed above
receive an affirmative vote from all but one Representative,
then one or more Representatives voting in the affirmative
("Affirmative Representatives") may elect, by delivery of
written notice to the Chairman within 5 business days
following such vote, to submit the matter to binding
arbitration by an arbitration panel. Promptly following
receipt of such notice, but not later than 2 business days
thereafter, the Chairman of the Management Committee shall
provide written notice to the Representatives that a question
has been submitted to binding arbitration as provided for
herein. In order that the arbitration procedure not be
frustrated, if a Representative entitled to vote abstains from
voting on a matter requiring unanimous approval as provided
above, such Representative will be deemed to have
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cast an affirmative vote. If the Affirmative Representatives
submit a matter to arbitration, the Affirmative
Representatives and the Representative voting in the negative
("Negative Representative") agree that the Affirmative
Representatives will select an independent gas industry
expert, the Negative Representative will select an independent
gas industry expert, the two experts shall jointly select a
third such expert and the three experts shall form the
arbitration panel that shall determine, using as its sole
criteria the best business interest of the Partnership,
whether the matter before the Management Committee should be
approved notwithstanding the vote of the Negative
Representative. It is required that the arbitration panel be
selected and a decision rendered within 60 days of the date
that the Chairman of the Management Committee provides written
notice to the Representatives that a question has been
submitted to binding arbitration provided, that if the issue
to be determined by arbitration is the acceptance or
non-acceptance of any FERC order the effectiveness of which is
conditioned upon its acceptance in writing within a period of
thirty (30) days from its date of issuance, the Chairman shall
cause the Operator to promptly file with the FERC for an
extension of time within which to file a written acceptance of
such order to allow for sufficient time for arbitration
thereof in accordance with this Section 8.2.7. To the extent
not inconsistent with the terms hereof, any such arbitration
shall be conducted under the rules of the American Arbitration
Association and at a location agreed to by the arbitration
panel. The cost of any such arbitration shall be borne by the
Partnership. Any determination by such arbitration panel
shall be conclusive and binding on all Partners and shall be
enforceable against any Partner in court of competent
jurisdiction.
(i) Section 8.3.1 of the Partnership Agreement is amended to delete the
second and third sentences thereof and replace them with the following:
The Audit and Compensation Committee shall consist of three members,
one being selected by each Representative on the Management Committee,
other than the Representative selected by Northern Plains, if Northern
Plains or its affiliate is also serving as the Operator. No member of
the Audit and Compensation Committee shall be an employee, officer,
director of affiliate of the Operator.
(j) Section 8.4.2 of the Partnership Agreement is amended and restated in
its entirety to read as follows:
8.4.2 Northern Plains may not be removed from the office of operator
except upon affirmative finding by unanimous vote of the
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Representatives other than the Representative designated by
Northern Plains if the total number of Representatives is four
or less or, if the total number of Representatives is five or
more, upon affirmative finding by the vote of the
Representatives with Partners' Percentages equal to no less
than sixty-five percent of Partners' Percentages that the
Operator has, through misfeasance, nonfeasance or gross
negligence, acted in a manner contrary to the best interests
of the Partnership. A vote on removal of the Operator may be
held only after the Operator has been given reasonable notice
of, and an opportunity to be heard on, a call for removal by
one or more Representatives.
(k) Section 8.7 of the Partnership Agreement is amended to add the
following introductory clause thereto:
"Except as provided in Section 8.3.1, . . . . "
(1) Section 10 of the Partnership Agreement is amended to add a new
Section 10.6 to read as follows:
10.6 RIGHT TO MAKE OFFER. If a general partner of NBILP desires to
transfer its general partnership interest in NBILP to a party other
than an Affiliate of such general partner, such selling general
partner of NBILP must first provide every other general partner of
NBILP and the Partners with notice of such intent to transfer and for
a period of 30 days following the receipt by each non-selling general
partner of NBILP and each Partner, each non-selling general partner of
NBILP and each Partner shall have the right to submit an offer for the
general partner interest of such selling general partner of NBILP (and
any other interests in NBILP proposed to be sold by such selling
general partner of NBILP). Such selling general partner of NBILP
shall have no obligation to consider or accept any offers received
from the non-selling general partners of NBILP or the Partners and
from and after such 30 day period, such selling general partner of
NBILP shall be free to consummate the proposed transaction referred to
in its notices to the non-selling general partners of NBILP and the
Partners.
5. MISCELLANEOUS.
(a) Except as amended hereby, the terms and provisions of the Partnership
Agreement shall remain in full force and effect.
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(b) This Seventh Supplement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
(c) Each party hereto represents and warrants to every other party hereto
that (i) it has the full corporate or partnership power and authority to execute
and deliver this Seventh Supplement or consummate the transactions contemplated
hereunder, (ii) the execution, delivery and performance by such party of this
Seventh Supplement has been duly authorized by all necessary corporate or
partnership action on the part of such party, and (iii) this Seventh Supplement
has been duly executed and delivered by such party and constitutes the legal,
valid and binding obligation of such party, enforceable against such party in
accordance with its terms, subject, however, to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to time in
effect relating to the rights and remedies of creditors, as well as to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
executed by their respective duly authorized officers.
NORTHERN PLAINS NATURAL GAS COMPANY
(DIVESTING PARTNER)
BY: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PRESIDENT
NORTHWEST BORDER PIPELINE COMPANY
(DIVESTING PARTNER)
BY: /S/ G.L. BEST
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PAN BORDER GAS COMPANY
(DIVESTING PARTNER)
BY: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
TREASURER AND ASSISTANT
SECRETARY
TRANSCANADA BORDER PIPELINE LTD.
BY: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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BY: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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TRANSCAN NORTHERN LTD.
BY: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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BY: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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NORTHERN BORDER INTERMEDIATE LIMITED PARTNERSHIIP
NORTHERN PLAINS NATURAL GAS COMPANY
GENERAL PARTNER
BY: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PRESIDENT
NORTHWEST BORDER PIPELINE COMPANY
GENERAL PARTNER
BY: /S/ G.L. BEST
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PAN BORDER GAS COMPANY
GENERAL PARTNER
BY: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
TREASURER AND ASSISTANT SECRETARY
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